Credit card latest rules: You can now decide the billing cycle of your card. Details here

The Reserve Bank of India (RBI) has released amendment to the master direction-- credit card and debit card — Issuance and Conduct directions 2022. The latest amendments will come into force from March 7, 2024 onwards. 

Among several changes, the new RBI rules stipulate that at least once, the cardholder will be provided option to choose any date as the starting or closing date of the billing cycle. 

Instructions relating to  credit cards will apply to all credit card issuing banks and non-banking financial companies (NFBCs).

The new provisions have been explained with the help of a set of FAQs released by the RBI.

Here are some of the frequently asked questions :  

Can a cardholder modify the billing cycle of a credit card to any date?

The cardholder will be provided option to choose any date as the starting or closing date of the billing cycle at least once. 

Additionally, card-issuers may provide the option to modify the billing cycle through multiple channels such as helpline, dedicated email-id, interactive voice response (IVR), internet banking, mobile application and any other modes.

What can a customer do if a credit card is issued without his consent?

Card issuers are prevented from issuing unsolicited credit cards and are required to seek prior approval from the customer before issuing a card. 

However, if the customer receives an unsolicited card, they should refrain from activating or providing consent for activation of card through OTP or any other means.

ALSO READ: RBI’s new credit card rules: There’s now an option to change your billing cycle

In case no consent is received for activating the card, the card-issuer is required to close the credit card account without any cost to the customer within seven working days from the date of seeking confirmation.

Can a card issuer levy interest on the unpaid taxes/ levies/charges?

No, card-issuers will not levy interest or any other charges, on the unpaid taxes or charges. As the provision became effective from Oct 1, 2022, card issuers will not capitalise unpaid charges that have been billed from Oct 1, 2022.

Can a card be issued to other loan accounts such as overdraft facility, cash credit facility, working capital loan, etc?

Yes, it has now been enabled to issue various types of credit cards which can be customised to access the limits available in different loan accounts. For instance, a customer availing an overdraft facility from a bank can be issued a type of credit card to access the funds made available under the facility.

In case a cardholder makes partial payment, can a card-issuer charge interest/levy late payment charges on the total amount due? 

In case a cardholder does not clear the total amount due within the payment due date, interest free credit period will be lost, and interest may be levied from the date of transaction on the outstanding amount (adjusted for payments/refunds/reversed transactions as and when credited) and not on the total amount due.

What will be seen as credit card’s activation?

Customer-initiated process indicating intent to use a credit card such as PIN generation, modification of transaction control, Interactive Voice Response, recorded call to the customer care centre and SMS may be considered as activation.

However, if the card is not activated by the cardholder for more than 30 days from the date of issuance, card-issuers will need to procure One Time Password (OTP) based consent from the card holder.